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Aussie Dollar's Slide Fuels Bond Market Plunge

By

James Glynn

Updated June 24, 2013 3:47 a.m. ET

The Australian dollar continued to fall Monday, sparking the biggest one-day sell-off in government bonds since the turmoil in global markets that followed the collapse of U.S. investment bank Lehman Brothers in late 2008.

Bond traders said the sell-off was triggered by weakness in U.S. Treasurys in Asia but exacerbated by the fall in the Australian dollar, which has prompted market participants to lower expectations of a further cut in interest rates by the Reserve Bank of Australia, or RBA.